Pre Market Report-Gap down opening on the cards for Sensex on fresh Fed jitters
29/08/2016
Indian equity benchmarks are likely to witness a negative opening on Monday tracking a bearish trend across most Asian stocks as investors across the globe weighed comments from Fed Chair Janet Yellen who on Friday stressed that the case for monetary tightening in the world’s biggest economy had strengthened, curbing the lure for risky assets. Losses in the CNX Nifty Index Futures for September delivery which were trading at 8,598, down by 0.34 per cent or 29 points at 10:40 AM Singapore time, signal that the Sensex may open lower today. While Yellen stopped short of unveiling the specific timing of a Fed rate hike, Fed Vice Chairman Stanley Fisher indicated the possibility of September tightening. An earlier than expected Fed move may result in volatility in capital flows into emerging markets including Asia’s third biggest economy. Traders this week will eye key macro-economic data including manufacturing and services PMI numbers for August which will offer further cues over the health of the Indian economy. The focus will also be on auto sales for August while shares of DLF, MOIL, Indian Oil Corporation and Bharat Petroleum Corporation will hog the limelight as they reveal their April-June quarter earnings data. Marking a second straight loss, the 30-share Sensex last week fell 294.75 points or 1.04 per cent to 27,782.25.
Risings odds of a US rate hike next month weighed on most stocks across Asia today which were trading in the negative terrain. Shanghai Composite and Hang Seng fell while Japan’s Nikkei 225 jumped over 2 per cent after Bank of Japan governor Haruhiko Kuroda reiterated a commitment to ease monetary policy further if necessary, stressing that he would step up economic stimulus “without hesitation.” Wall Street ended mostly lower on Friday as speculation of a US interest rate hike in September strengthened after Yellen’s optimistic economic assessment. Yellen reaffirmed faith that firmer labour markets will gradually bring back inflation to the central bank’s 2 per cent goal, paving the way for tightening-probably as early as next month. However, chances of the Fed tightening rates in September remain data dependent with August jobs data keenly eyed. Meanwhile, US Q2 economic growth was downwardly revised to 1.1 per cent annualized pace from 1.2 per cent earlier on lower government spending and bigger depletion of stockpiles.
29/08/2016
Indian equity benchmarks are likely to witness a negative opening on Monday tracking a bearish trend across most Asian stocks as investors across the globe weighed comments from Fed Chair Janet Yellen who on Friday stressed that the case for monetary tightening in the world’s biggest economy had strengthened, curbing the lure for risky assets. Losses in the CNX Nifty Index Futures for September delivery which were trading at 8,598, down by 0.34 per cent or 29 points at 10:40 AM Singapore time, signal that the Sensex may open lower today. While Yellen stopped short of unveiling the specific timing of a Fed rate hike, Fed Vice Chairman Stanley Fisher indicated the possibility of September tightening. An earlier than expected Fed move may result in volatility in capital flows into emerging markets including Asia’s third biggest economy. Traders this week will eye key macro-economic data including manufacturing and services PMI numbers for August which will offer further cues over the health of the Indian economy. The focus will also be on auto sales for August while shares of DLF, MOIL, Indian Oil Corporation and Bharat Petroleum Corporation will hog the limelight as they reveal their April-June quarter earnings data. Marking a second straight loss, the 30-share Sensex last week fell 294.75 points or 1.04 per cent to 27,782.25.
Risings odds of a US rate hike next month weighed on most stocks across Asia today which were trading in the negative terrain. Shanghai Composite and Hang Seng fell while Japan’s Nikkei 225 jumped over 2 per cent after Bank of Japan governor Haruhiko Kuroda reiterated a commitment to ease monetary policy further if necessary, stressing that he would step up economic stimulus “without hesitation.” Wall Street ended mostly lower on Friday as speculation of a US interest rate hike in September strengthened after Yellen’s optimistic economic assessment. Yellen reaffirmed faith that firmer labour markets will gradually bring back inflation to the central bank’s 2 per cent goal, paving the way for tightening-probably as early as next month. However, chances of the Fed tightening rates in September remain data dependent with August jobs data keenly eyed. Meanwhile, US Q2 economic growth was downwardly revised to 1.1 per cent annualized pace from 1.2 per cent earlier on lower government spending and bigger depletion of stockpiles.
